Let's start with the ugly 'c' word to get it over with. Coronavirus. It would be a truism to write that the global pandemic has drastically affected craft breweries, as there is arguably no industry on which it has not left its mark. Before 2020, producers of kraft beer (in Poland, "craft" is spelled with a "k" and not, as intuition would have it, with a "c"; it's just domestic folklore) were living like in a clover
The dynamic development of the market, the growing number of fans, the penetration into pop culture (to mention Remigiusz Mroz's books) meant that even if someone didn't drink craft beer, they were fully aware of its existence. This meant that whatever you produced, you were able to sell it very quickly and at a satisfactory margin. Regardless of the style of beer, the degree of experimentation, but also the price.
Kraft goes to the supermarkets
The pandemic changed everything. In the first instance, a significant branch of sales was cut - the speciality premises, also known as multitaps. For many beer producers, these were bringing in up to 50% or more turnover on a good margin. The same was true for outdoor events, speciality festivals, etc. The closure of these sales sources meant not only a reduction in revenue, but also brought a problem to be solved: what to do with the hundreds of kegs (beer containers from which beer is poured in pubs 'on tap') that breweries had prepared for pubs and beer events?
Rescue, above all for those largest breweries with commercial departments (this was not standard in the craft beer market before the pandemic), came from the modern channel - large supermarket chains. Entities such as Lidl, Kaufland, Carrefour, Auchan, Polomarket, Tesco, Żabka, etc. had, of course, already noticed the growing popularity of kraft and set aside more and more space for these products on the shelves of their shops, but it was during the pandemic period that they experienced a noticeable increase in purchases.
One of the reasons for this is probably the change in consumer habits (but also opportunities) during this time. The customer preferred to go to one place to shop and pack everything he or she wants in the basket. In addition to this, craft beer in the pandemic has become a kind of 'accessible luxury good', i.e. a premium product that we buy as an accessory, making us happy but still at an attainable price compared to, for example, whisky and cheaper than a good wine.
As I mentioned above, the breweries that have dealt best with the challenge of reaching new customers have been those that have shed the clothes of home brewers and have not merely relied on their imagination, but have prepared to grow and scale the business. The largest players in the craft beer market have, over the course of 11 years, i.e. since, let's say, the outbreak of the beer revolution, transformed from tiny companies founded by beer fanatics wanting to show the Polish consumer that the world of beer does not end with mass-produced lagers, into efficient enterprises employing a dozen or sometimes even several dozen people.
Brewery founders are just as likely to wear t-shirts with their company's name on them and turn up at beer festivals as they are to dress in elegant shirts, joining networking groups and meeting major players from the FMCG and HoReCa industries.
New customers = different production
The change in the profile of the end customer has also forced a slightly different approach to production. Firstly, nowadays every large craft brewery has a fixed portfolio. This probably sounds obvious to most of you, but the specifics of the - let's call it - traditional branch of our market dictate the release of ever new products. In the case of the biggest players on the market, repetition is what counts, although of course they too understand that if they want to teach a craft beer fan to buy from their chain, they have to tempt them with novelties.
Second: the product must be relatively cheap. Currently, the magic limit for the final price for a single beer in a retail chain has been set at PLN 9.99. There are exceptions to the rule; exclusive beers or beer sets, but as a principle the above price should not be exceeded (due to rampant inflation this will probably change soon). Consequently, when preparing beer for the chains, lighter, balanced beers, requiring shorter production times, tend to be targeted. All varieties of IPA, light beers with fruit (sweet Pastry or sour Sour) dominate, wheat beers (Hefeweizen, Witbier) appear, while it is hard to find Imperial Stouts or barrel-aged beers. These still reach the market, but in very limited quantities, mainly in speciality shops.
The above has also changed the form of income generation. We are increasingly moving from 'low volume but high margin' to a 'lower margin but high sales volume' system.
Thirdly: one of the symbols of the beer revolution, which carried on its banner an intensity verging on aggressiveness, a very high bitterness, is slowly becoming obsolete. Of course, even in supermarkets we can find styles such as West Coast IPA, distinguished by a powerful dose of bitterness, but nowadays the emphasis is on balance, and the hops are mainly used for aroma. And it is the bursting scent of tropical fruit and citrus, brought in by new-wave hop varieties, that is the icon of kraft today.
Fourthly: since the beginning of the craft beer industry, one of the objectives has been to convince the consumer that this beverage can be as fine as wine or whisky (because, in fact, it is). That it is suitable for all occasions, that it can be used to celebrate life's important moments, that its tasting can be the epicentre of an evening and not just an add-on. That it can be experimented with, adding literally anything we can qualify as 'edible'.
To some extent, this image has succeeded in smuggling itself into the consciousness, especially of the more committed customers. Nevertheless, for most buyers, beer - even if noticeably better, tastier, more intense - is simply supposed to be one of the elements of a party, not the object of supreme attention. Drinkability, sessionability, intensity that complements the evening, not distracts from it, is expected. Hence, even breweries that used to be famous for their use of unusual additives are now focusing on the above characteristics.
The craft beer market has thus become a consumer market today, not a producer one. It is consumers who decide what beers they want to drink, and breweries have to adapt to these needs, with the rare smuggling in of their unconventional ideas. As a brewer, I somewhat regret this fact (I have always liked to go wild when inventing a recipe), as a consumer I am happy (because I have much easier access to good beer), and as a co-manager of a brewery - I accept it, carefully analysing the current trends.
Jerzy Gibadło
Managing Director w browarze Brokreacja
